Series 66 Exam With Accurate Solutions 100% Correct
Earned Income - ANSWER -Gratuities
- Royalty Payments
- Bonus Commissions
403(b) Plans are allowed to invest in: - ANSWER - Mutual Funds
- Fixed Annuities
- Variable Annuities
Borrowing Money - ANSWER IA is not allowed to borrow money from a client - unless the
client is a bank or broker-dealer, in the business of lending money.
Seminars / Conferences - ANSWER Educational: may pay for travel & accommodations
so long as disclosed to clients
Promotional: can only compensate for the seminar registration fee. Must be disclosed to
client.
Denied Registration - ANSWER - Convicted of misdemeanor involving securities or
felony in past 10 yrs
- misleading statements in application
- application incomplete
Broker-Dealer under USA - ANSWER - defined as a person who engages in securities
transactions for customers or its own account
- Can be legally structured as a sole proprietorship, partnership or corporation
- Registered in the state may also register in the state as an IA
,Take Custody - ANSWER USA: more than $500 or 6 months of fees in advance
- receives quarterly management fess from custodian by direct deduction with client
consent.
Institutional Buyer defined under USA - ANSWER Any person defined by the
Administrator by rule or order
USA: exempt offering of a pre-organization certificate - ANSWER Advertisement are
permitted
offering cannot be made to more than 10 investors
"Blue Sky" laws provide for registration of:- ANSWER Broker-Dealers
Agents
Investment Advisers
Agent becoming Statutory B/D- ANSWER an agent that sells securities to a customer in
a transaction that is not recorded on the books & records of his/her Broker-dealer.
Electronic Storage Media- ANSWER -paper/hard copy form must be preserved and
maintained for 5 yrs
-duplicate copy of record can be immediately made to preserve/maintain for 5 yrs
-original and duplicate must be kept in different locations for 5 yrs
-must be preserved in a format that is UNalterable, non rewritable.
Advisor Articles of Incorporation - ANSWER must be kept for 3 yrs post adviser ceases
business
USA: "natural person" includes: - ANSWER An Agent
NASAA: IA's must do so on an annual basis. - ANSWER Modify Form ADV disclosure
document and submit to existing clients, if any material changes are made.
Registered Investment Advisor charges a % fee of AUM. He invests customer funds
,solely into Mutual Funds that have a sales charge - is this permitted - ANSWER Yes -
providing the adviser discloses to the customer both the management fee and the sales
charge
Required Net Capital or Net Worth by the Administrator applies to: - ANSWER
Broker-Dealers & Investment Advisers
Wrap Fee - ANSWER Applied to a "wrap account" where all services performed by the
broker are "wrapped" into a single account. Single annual fee based on % of AUM is
charged.
Broker-Dealer mus register in the state if: - ANSWER - Firm with No place of business in
the state, with 25 clients in the state over the previous 12 months
Firm with a place of business that deals exclusively with issuers
Firm with a place of business that deals exclusively with financial institutions.
* de minimis exemption for BD is generally 3 clients or fewer
Information to be recorded on an order ticket - ANSWER Customer name/account
number
execution price & order size
identity of agent accepting the order
Administrator may inspect the books and records of a registrant: - ANSWER Within any
premises where the registrant keeps records, within or outside that state.
Administrator may require a Surety Bond for: - ANSWER Agents
Broker-Dealers
Investment Advisers
In USA, "person" is defined as: - ANSWER Anyone who legally can issue or deal in
securities. EXCLUDES administrator.
, A willful & fraudulent violation of the USA occurs if - ANSWER A deceptive sales
presentation is made to a client, whether or not a sale results.
Registration Statement for securities includes - ANSWER Current balance sheet &
income statement
Business description
Use of proceed of the offering
Offering Terms
Legal Opinion
Accountant's Opinion
Defined as a federal covered adviser: - ANSWER Advisers with 100 mm + AUM
Advisors to investment companies
Advisers not subject to State regulation
If a customer places a sell order before the IAR is aware of negative information -
ANSWER The transaction is not considered insider trading
Anti-fraud provisions of the USA apply to the sale of - ANSWER Everyone & Everything
Does not apply to "pure insurance products" such as whole life or fixed annuities.
Administrator can file a U-6 form for - ANSWER A cease & desist order entered by the
administrator against an IAR
An injunction entered by a court of law in the state against and IAR
Written complaint received from a client of the investment adviser alleging that the
adviser stole $150,000
The LAST step in opening a new account for a customer - ANSWER Executing the first
Earned Income - ANSWER -Gratuities
- Royalty Payments
- Bonus Commissions
403(b) Plans are allowed to invest in: - ANSWER - Mutual Funds
- Fixed Annuities
- Variable Annuities
Borrowing Money - ANSWER IA is not allowed to borrow money from a client - unless the
client is a bank or broker-dealer, in the business of lending money.
Seminars / Conferences - ANSWER Educational: may pay for travel & accommodations
so long as disclosed to clients
Promotional: can only compensate for the seminar registration fee. Must be disclosed to
client.
Denied Registration - ANSWER - Convicted of misdemeanor involving securities or
felony in past 10 yrs
- misleading statements in application
- application incomplete
Broker-Dealer under USA - ANSWER - defined as a person who engages in securities
transactions for customers or its own account
- Can be legally structured as a sole proprietorship, partnership or corporation
- Registered in the state may also register in the state as an IA
,Take Custody - ANSWER USA: more than $500 or 6 months of fees in advance
- receives quarterly management fess from custodian by direct deduction with client
consent.
Institutional Buyer defined under USA - ANSWER Any person defined by the
Administrator by rule or order
USA: exempt offering of a pre-organization certificate - ANSWER Advertisement are
permitted
offering cannot be made to more than 10 investors
"Blue Sky" laws provide for registration of:- ANSWER Broker-Dealers
Agents
Investment Advisers
Agent becoming Statutory B/D- ANSWER an agent that sells securities to a customer in
a transaction that is not recorded on the books & records of his/her Broker-dealer.
Electronic Storage Media- ANSWER -paper/hard copy form must be preserved and
maintained for 5 yrs
-duplicate copy of record can be immediately made to preserve/maintain for 5 yrs
-original and duplicate must be kept in different locations for 5 yrs
-must be preserved in a format that is UNalterable, non rewritable.
Advisor Articles of Incorporation - ANSWER must be kept for 3 yrs post adviser ceases
business
USA: "natural person" includes: - ANSWER An Agent
NASAA: IA's must do so on an annual basis. - ANSWER Modify Form ADV disclosure
document and submit to existing clients, if any material changes are made.
Registered Investment Advisor charges a % fee of AUM. He invests customer funds
,solely into Mutual Funds that have a sales charge - is this permitted - ANSWER Yes -
providing the adviser discloses to the customer both the management fee and the sales
charge
Required Net Capital or Net Worth by the Administrator applies to: - ANSWER
Broker-Dealers & Investment Advisers
Wrap Fee - ANSWER Applied to a "wrap account" where all services performed by the
broker are "wrapped" into a single account. Single annual fee based on % of AUM is
charged.
Broker-Dealer mus register in the state if: - ANSWER - Firm with No place of business in
the state, with 25 clients in the state over the previous 12 months
Firm with a place of business that deals exclusively with issuers
Firm with a place of business that deals exclusively with financial institutions.
* de minimis exemption for BD is generally 3 clients or fewer
Information to be recorded on an order ticket - ANSWER Customer name/account
number
execution price & order size
identity of agent accepting the order
Administrator may inspect the books and records of a registrant: - ANSWER Within any
premises where the registrant keeps records, within or outside that state.
Administrator may require a Surety Bond for: - ANSWER Agents
Broker-Dealers
Investment Advisers
In USA, "person" is defined as: - ANSWER Anyone who legally can issue or deal in
securities. EXCLUDES administrator.
, A willful & fraudulent violation of the USA occurs if - ANSWER A deceptive sales
presentation is made to a client, whether or not a sale results.
Registration Statement for securities includes - ANSWER Current balance sheet &
income statement
Business description
Use of proceed of the offering
Offering Terms
Legal Opinion
Accountant's Opinion
Defined as a federal covered adviser: - ANSWER Advisers with 100 mm + AUM
Advisors to investment companies
Advisers not subject to State regulation
If a customer places a sell order before the IAR is aware of negative information -
ANSWER The transaction is not considered insider trading
Anti-fraud provisions of the USA apply to the sale of - ANSWER Everyone & Everything
Does not apply to "pure insurance products" such as whole life or fixed annuities.
Administrator can file a U-6 form for - ANSWER A cease & desist order entered by the
administrator against an IAR
An injunction entered by a court of law in the state against and IAR
Written complaint received from a client of the investment adviser alleging that the
adviser stole $150,000
The LAST step in opening a new account for a customer - ANSWER Executing the first
